The COVID-19 Shock and Spanish Hotel Activity

This paper examines the impact of the Covid-19 pandemic on Spanish hotel activity to establish whether it has had temporary or permanent effects. The empirical investigation is based on both quantitative and qualitative approaches. For the former, data from Google Trends and the Spanish Statistical Office (INE) are collected to create a Leading Hotel Activity (LHA) index and fractional integration and cointegration methods are applied. For the latter, online interviews of a focus group in the Spanish hotel sector are conducted. The analysis also distinguishes between the five main source countries for Spain and the main five tourists regions in Spain. The results show that the impact of the Covid-19 shock on Spanish hotel activity was temporary, and that it disappeared at a faster rate in the case of the Balearic Islands and of tourists from Germany. Moreover, the qualitative evidence indicates that there is a strong linkage between intentions and behaviour in the Spanish tourism sector.